Banking Awareness Capsule : March - 2017 www.BankExamsToday.Com 3/27/2017 BankExamsTodayEditorial Table of Contents 1. Multilateral Investment Guarantee Agency: Role in Healthy Investment Environment#2 2. List of Currency Terms With Explanation#3 3. National Financial Switch: Gateway of ATM Switching#4 4. 10 Important Banking Terms To Remember#6 5. Regional Rural Banks in India - Their Sponsors and Head Office#Error! Bookmark not defined. 6. HDFC BANK (Housing Development Finance Corporation)#7 7. Aadhaar App - A New Era In Digital Payments#8 8. List of Insurance companies in India: Tagline, Founder and Heads#..10 9. Banking And Financial Awareness#..13 10. Exim Bank :All You Need to Know#..14 11. Functions of Exim Bank:#.15 12. Board of members:#..16 13. Types of Export Finance#.16 14. SBI#s Minimum Balance Penalty: All You Need to Know$..18 15. Punjab National Bank: Learn Key Points Using Mind Map$..20 16. Federal Bank : Remember Key Points$$23 17. Pros and Cons of SBI's Minimum Balance Penalty$$24 18. Indian Bank : Remember key points using Mind Map$$26 19. Types of Foreign Accounts in India$$.27 20. Twin Balance Sheet Problem in India: A Halt in the Progress$$28 21. Public Private Partnership: All You Need To Know$$29 22. State Bank Of India: Learn Key Points Using Mind Map$..31 23. List of Important Abbreviations For SBI PO$$.34 24. Role of Immediate Payment Services in Banking$..36 25. Difference Between Various NRI Accounts in India$$37 26. Allahabad Bank: Remember Key Points$$.40 27. Pros and Cons of RBI's Proportional Reserve System##42 28. Banking Cash Transaction Tax (BCTT): Explained##.43 29. ICICI Bank: Learn Key Points Using Mind Map##.44 30. NPA and SARFAESI Act, 2002##.47 31. Minimum Reserve System of RBI: Explained##.48 32. International Financial Organizations: Headquarters & Functions##50 33. Difference Between Cental Bank And Commercial Bank##52 34. Banking & Financial Awareness One-Liner: March 2017#..53 Multilateral Investment Guarantee Agency: Role in Healthy Investment Environment Introduction: $ Multilateral Investment Guarantee Agency (MIGA) is an international financial institution associated with the World Bank Group. # It came into being in the year of 1988 and is primarily a development finance institution. # It has its headquarters in Washington D.C., United States and has around 181 nations as its members. # The prime motivation of MIGA as an International Financial Institution is to encourage a confident investment environment via the act of insurance against unforeseen situations, especially in developing nations. Functions: # Offers insurance to cover different types of non-commercial risks such as (i) Risks associated with currency inconvertibility. (ii) Risks associated with government expropriation. (iii) Risks associated with war. (iv) Risks associated with terrorism. (v) Risks associated with civil disturbances in the host country. (vi) Risks associated with non-honoring of financial obligations between Investing and host entity # Offers insurance coverage to investment vehicles such as (i) Equity, loan, share holder loans and share holder guarantees. (ii) Management contracts, asset securitization bonds, leasing activities, franchise agreements and license agreements. # Small Investment Programme by MIGA aims to promote FDI specifically into small and medium enterprises, via offering exclusive insurance coverage scheme SME's. # Offers political risk insurance to a wide range of investments effectively, especially in developing nations. # Promotion of Foreign Direct Investment into developing countries to support economic growth, reduce poverty and improve standard of living. # Creation of new Job opportunities, development of infrastructural facilities, generation of new tax revenues, as well as effective utilization of natural resources via adoption of Judicious programmes and policies. # Insurance of Long term debt equity as well as other assets and contracts of long gestation period. Role in Healthy Investment Environment MIGA endeavors to promote a healthy investment environment in developing nations by insuring the Investment against various risks associated with the peculiarities of developing nations, which ranges from political risks to investment related insecurities. It is being owned by its 181 member governments which includes both developing as well as developed nations. Membership in MIGA is available only to those countries who have membership with the World Bank especially International Bank for Reconstruction and Development (IBRD). It is being governed by the member countries, represented by the council of Governors, Board of Directors and an Executive Vice President who strategically coordinates the functioning of the organization. Conclusion MIGA which has the characteristics of a Development Finance Institution is a non-political entity that plays out its role as a multi lateral financial entity, offering insurance services to potential investors as well as the investments which they undertake in developing nations. This infact ensures that Foreign Direct Investments do find destination in almost all developing nations irrespective of their internal as well as external environment and the investors do get the assurance, confidence as well as the expected potential benefits out of the same. This do well reflects the motives of the World Bank group which is to ensure the sustained development of the nations around the world. List of Currency Terms With Explanation Legal tender: As per provisions of coinage Act 1996, bank notes, currency notes and coins (Re. 1and above) are legal tender for unlimited amount. The subsidiary coins (below Re. 1) are legal tenders for sum not exceeding Re 1. Issue of 1, 2 and 3 paisa coins discontinued wef Sep 16, 1981. Currency chest: Currency chests are operated by the Reserve Bank of India (RBI) so that they can provide good quality currency notes to the public. However, RBI has appointed commercial banks to open and monitor currency chests on behalf of RBI. The money kept in currency chests in the commercial banks is considered to be kept in RBI. Small coin depot: The bank branches are also authorized to establish Small Coin Depots to stock small coins. The Small Coin Depots also distribute small coins to other bank branches in their area of operation. Soiled note: "Soiled note" means a note which, has become dirty due to usage and also includes a two piece note pasted together wherein both the pieces presented belong to the same note and form the Mutilated Note: Mutilated banknote is a banknote, of which a portion is missing or which is composed of more than two pieces. Imperfect Note: Imperfect banknote means any banknote, which is wholly or partially, obliterated, shrunk, washed, altered or indecipherable but does not include a mutilated banknote. Soiled and Mutilated banknotes can be exchanged for value. All banks are authorized to accept soiled banknotes for full value. They are expected to extend the facility of exchange of soiled notes even to non-customers. All currency chest branches of commercial banks are authorized to adjudicate mutilated banknotes and pay value for these, in terms of the Reserve Bank of India (Note Refund) Rules, 2009 A mutilated banknote can be exchanged for full value if: # For denominations of Re. 1, Rs. 2, Rs. 5, Rs. 10 and Rs. 20, the area of the single largest undivided piece of the note presented is more than 50 percent of the area of respective denomination, rounded off to the next complete square centimeter. # For denominations of Rs. 50, Rs.100, Rs. 500 and Rs. 1000, the area of the single largest undivided piece of the note presented is more than 65 percent of the area of respective denomination, rounded off to the next complete square centimeter. National Financial Switch: Gateway of ATM Switching What is NFS: National Financial Switch is a network of shared ATM#s. It was developed by Institute for Development and Research in Banking Technology (IDRBT), Hyderabad in 2004. It is run by the National Payment Corporation of India (NPCI) currently. Objective: $ It aims to interconnect all the ATM#s in the country and facilitate easy banking to the users.NFS connects the ATM of member banks under a single network. The user or the customer need not avail the use of his core/ home bank for transactions. Since all the ATM of the member banks are connected, the customer can use any ATM other than that of his specified bank. $ The banks without ATM network but which can provide core banking facilities with 24x7 services can join the NFS through a sponsor bank. The objective behind such a move is to enable the non-scheduled cooperative banks and other regional rural banks (RRB) to access the wide network of ATMs in the country, enabling the customers of such bank to access banking services through any ATM of a connected bank. NOTE: #Before 14 August 2011, NFS was limited to #The first bank to open ATM service in India was the Hongkong and Shanghai Banking Corporation (HSBC) in 1987 in Mumbai. Background: $ The national financial switch started with connecting the automated teller machine (ATM) of three banks, which are ICICI Bank, corporation Bank and Bank of Baroda. Later IDBRT worked to bring all the banks under common network thereby connecting 37 banks by 2009. # Though NFS was developed and maintained by IDBRT, it was later shifted to National Payments Corporation of India (NPCI) in the year 2009. Services offered in NFS: NFS offers various basic transactions through its member banks, such as: $Balance Enquiry / Balance available with the account holder $Cash Withdrawal $Change of ATM PIN $Mini Statement of the transactions made NFS also introduced value-added services, such as: $Request for Cheque book $Request for Transactions Statement. $Instant fund transfer $Security $Card to card fund transfer, in which transactions can be done using an ATM or debit card. The card holder has to enter the ATM/ Debit card number of the person whom the fund is to be transferred.